An archive of papers belonging to LS Lowry that was salvaged by a rag-and-bone man has revealed just how cheaply the artist's paintings were being snapped up for in the early 60s.

Works depicting north-of-England streetscapes, which are now eagerly collected, were up for grabs for less than £50, the papers show.

One note revealed that a painting called Country Road near Lytham sold for £35 in the early 60s. Last year it went for more than £300,000. Another painting, Old Houses, sold for £45. It is worth about £500,000 now.

The cache was discovered in the early 1980s in bin bags by rag-and-bone man George Stevens outside a scrap yard in Ardwick, Manchester. His son John Stevens said: "My dad owned a scrap yard and people would often leave things outside. In 1981 someone dumped some black bin liners outside the yard and they had been torn open and the papers were blowing everywhere and even into the river.

"My father saw the name Lowry and realised they might be interesting and gathered as many up as he could. He handed them in to the police but no one came forward so they were returned to him and they've been sitting in a box ever since."

Stephen Sparrow of Peter Wilson auctioneers in Nantwich, Cheshire, said there had been a great deal of interest in the papers. "This is a fascinating and intriguing find and there is probably lots to be discovered among it," he said. "There are letters in Lowry's own hand, bank statements, accounts and credit notes from the galleries that sold his paintings."

Unfortunately he had not been able to find any pictures or even a doodle in a margin in the cache.

The sale is on 12 July and the papers are expected to fetch at least £800.